Council boosts their fringe benefit package

Around April each year, I ask City Treasurer and Finance Director Dave Christian for an update on the salaries and fringe benefits paid to City Council members.

I'm especially interested in changes in benefits collected by council members because the fringe package totals more than twice the $500 monthly salary and mirrors benefits paid to full-time employees.

Since my report last year, three council members – John Anderson, Tom Lindsey and Mark Schwing – who didn't accept a previous increase in the “cafeteria plan” portion of the fringe package began taking the full amount.

“Last year [the] three were at $833, even though the approved amount was $945. However, during this past year, all three requested to be increased to the $945,” Christian noted. The “cafeteria plan” portion recently jumped 7.9 percent to $1,020 monthly retroactive to Jan. 21 and will increase another 7.3 percent to $1,095 next Jan. 1.

Although some council members refer to the $1,020 monthly payment as a medical or health benefit, the proper term is “cafeteria plan,” as described in the text of a unanimously adopted resolution that set compensation for this and next year.

According to the resolution, the benefit is “utilized first to pay health insurance premiums; any residual amount may be applied to the...member's deferred compensation.” Currently, all five apply the full amount to deferred compensation, Christian noted.

Deferred compensation is placed in 457 (b) plans that resemble 401 (k) plans used by many private sector workers, but with some advantages related to disbursement.

In addition, stated Christian, “All council members except [Gene] Hernandez have a monthly PERS contribution of $123.21 made by the city on their behalf,” and starting July 1, “each of those council members will contribute 2.5 percent of their stipend to PERS, thus lowering the city's contribution by $12.50 each per month....”

PERS, the Public Employees Retirement System, under a “2 percent at 55” formula, will pay a monthly retirement allowance of $80 to a two-term councilperson and $120 to a three-term councilperson, with annual cost-of-living increases, after age 55 for life.

Hernandez, already retired under PERS, doesn't receive the city's dental and vision benefit, which is provided the others “on an as-needed basis,” stated Christian. The city pays $9.20 monthly per person for self-insured dental and vision plans.

Interestingly, an Employee Assistance Program, described by Christian as “an overall physical and emotional well-being program, offering counseling and personal services in a wide variety of areas” is available to council members at a city cost of $3.02 monthly per person.

Hernandez, who pledged in the 2012 election to forgo salary and benefits, says he's donating his salary and intends to donate his deferred compensation to charity. He isn't taking the $36 monthly phone allowance but will accept the $100 monthly auto allowance.